What is limit utilization factor in SAP FS-BA-AN-LM - Limit Manager?

SAP Term: limit utilization factor

• Component: FS-BA-AN-LM

• Component Name: Limit Manager

• Description: Specifies which part of the free credit line of a financial transaction may be included in the calculation of the exposure. The limit utilization factor is used in conjunction with the CE product type, and the amount of limit utilization factor depends on the business partner information.

Smart SAP Assistant

• Key Concepts: 
  The limit utilization factor is a component of the SAP FS-BA-AN-LM Limit Manager. It is used to measure the utilization of a limit, which is a type of credit line that can be used to finance a customer’s purchase. The limit utilization factor is calculated by dividing the current outstanding balance of the limit by the total amount of the limit. 
  
  How to use it: 
  The limit utilization factor can be used to determine how much of a customer’s credit line has been used. This information can be used to assess the customer’s creditworthiness and determine whether additional financing should be granted. The limit utilization factor can also be used to monitor customer spending and ensure that customers are not exceeding their credit limits. 
  
  Tips & Tricks: 
  It is important to keep track of the limit utilization factor for each customer in order to ensure that customers are not over-utilizing their credit lines. Additionally, it is important to monitor changes in the limit utilization factor over time in order to identify any potential issues with customer spending. 
  
  Related Information: 
  The limit utilization factor is closely related to other components of the SAP FS-BA-AN-LM Limit Manager, such as the credit line and the credit limit. Additionally, it is important to understand how these components interact with each other in order to effectively manage customer credit lines.